Opening the door to smart buildings in the EU

Figure 1: A smart meter. So far rollout has only been completed by four Member States:: Italy, Estonia, Sweden and Finland.

Figure 2: Features of the Smartness Indicator, as recommended by BPIE. Source: BPIE.

Figure 3: With 90% of the EU’s current building stock due to still be standing in 2050, renovation is key. Source: Shutterstock.

The Buildings Performance Institute Europe (BPIE) looks at how EU legislation needs to change in order for smart buildings to take hold in Europe in its new report ‘Opening the door to smart buildings.’ The report is timely, considering that EU bodies are currently in the process of recasting crucial Directives pertaining to energy efficiency in buildings.

A more efficient and smarter building stock is a cornerstone of a decarbonised energy system. Increased integration of distributed energy resources, renewables and storage and the growing peak demand for electricity will drive the need for increased flexibility, demand-response capabilities and consumer empowerment to further develop an affordable, reliable and decarbonised energy system. Buildings have the potential to be at the forefront of providing flexibility to the energy system, through improved energy production, control, storage and demand-response.

Market frameworks and regulation need to allow buildings to connect to and interact with the energy system. To date, this is not always the case across the European Union (EU). For example, many EU Member States do not allow residential buildings to participate in demand-response activities,1 thus innovation and development within this field are being delayed. Without a forward-looking legislative framework, the EU risks losing out to other markets in terms of competitiveness and innovation. Current policy discussions lack ambition to encourage buildings to play their role as micro energy-hubs.

Smart buildings enable and ensure a healthy and comfortable living and working environment for their occupants. To be considered smart, a building should encompass functions that include automation and user-friendly controls. The ‘smartness’ of a building depends on the capacity of its functions and the inter-operability of its different components. The concept of smart buildings has been explored in BPIE’s previous reports.1-3

One of the biggest barriers to a revolution and a widespread penetration of smart buildings across the EU is its legislative framework. Existing legislation should be revised and future-proofed in order to support the features of smartness and envisage a future smart building stock in Europe. This means highly energy-efficient buildings that drive a faster decarbonisation of the energy system, empower their users and react to their needs in terms of comfort, health, indoor air quality and safety.

While the proposed Clean Energy for All Europeans policy package4 makes some incremental steps in the right direction, several of the proposed measures must be clarified and others should be added for the package to fulfil its purpose. The report ‘Opening the door to smart buildings’ links the support needed with the relevant legislation that either currently exists or has been recently proposed by the European Commission. It also assesses whether the actions to be taken are sufficient. It is summarised in this article.

EU policies should ensure buildings can take up a leading role in the energy transition, at the same time as ensuring high building performance, dynamic operability between components of a building and its occupants and responsiveness of buildings to interact with the energy system around them.

Europe’s innovation and technology leadership could gain much-needed support through this transformation of the building stock, benefitting both the economy and European citizens, by providing healthier places to live and work, as well as innovation and jobs in the construction sector. Innovation within the information and communication technologies (ICT) and clean energy sectors is progressing rapidly. If the EU is unsuccessful in adapting and upgrading the current legislative framework, there is a risk of not just hampering the development, but also locking-in the use of soon-to-be-outdated technologies.

On 30 November 2016 the European Commission released important pieces of European energy legislation in the ‘Clean Energy for all Europeans’ package. The package covers energy efficiency, renewable energy, the electricity market, consumers and governance rules for the Energy Union. Currently, the package is being negotiated between the European Commission, the EU Parliament and the Council. The result will be a once-in-a-decade opportunity to propel the EU towards a future-proofed, efficient and sustainable building stock.

The ‘smartness indicator’

As part of the tabled revisions to the Energy Performance of Building Directive (EPBD), the European Commission proposed the introduction of a smartness indicator.4 To give value to smart buildings, the indicator must pull the market in the direction of smarter buildings, while also providing meaningful information on the potential of the building to prospective new tenants or buyers.

The characteristics set out in BPIE’s definition of a smart building provide a vision of what smart buildings should entail.3 The smartness indicator should reflect this by assessing those features required in a smart building. Features of the smartness indicator, recommended by BPIE, are shown in Figure 1. They should result from embedded and interconnected technical building equipment, components, storage and appliances steered and optimised through dynamic and self-learning control systems.

Capturing and promoting the benefits of smart buildings for building users and occupants, the energy system, energy markets, the economy and society as a whole must be the underlying purpose of introducing the smartness indicator. The wide range of benefits for the above parties include cost savings, optimal building environments for inhabitants, reduced pressure on energy markets, increased security of supply, lower demand for additional capacity, reduced air pollution and climate change mitigation.

Further suggestions from BPIE

Beyond a clear definition for the smartness indicator, BPIE makes further suggestions to ensure energy-efficient and healthy buildings. These include ramping up deep renovation, boosting the market uptake of nearly zero-energy buildings (nZEBs), training building professionals and phasing out inefficient technologies. BPIE suggests an increase in dynamic operability by empowering all consumers with smart meters, optimising buildings with automation and controls and establishing system responsiveness. Occupants should be able to generate and self-consume renewable energy and demand response / dynamic pricing should be encouraged. There should also be immediate use or storage of renewable energy and synergies between smart buildings and electric vehicles. Some of these concepts are elaborated upon below.

Deep renovation

According to the Energy Performance of Buildings Directive (EPBD) Article 2a (Proposal), up to 90% of existing European buildings will still be in use in 2050. The majority is currently inefficient, making deep renovation of the building stock a necessity to meet the EU’s climate and energy goals. A smooth transition to an energy-efficient and healthy building stock requires looking at several areas of legislation. Delivering greater energy efficiency and penetration of on-site renewable energy requires supportive policies in the EPBD and the Renewable Energy Directive.

The Commission’s proposal for revising the EPBD is not sufficient to stimulate faster and deeper renovation. Fostering renovation activities requires striking a balance between creating tools that stimulate the financial market for energy renovations and defining mandatory requirements for better energy performance of public and commercial buildings. This means developing more comprehensive and user-friendly tools such as building renovation passports,5 to better guide building owners and investors on how and when to invest in their buildings, and expanding existing legislation to require not only the renovation of central government buildings but of all public and commercial buildings.

A stronger link between the national renovation strategies and how Member States allocate the European Structural and Investment Funds would be beneficial, in terms of both ensuring an optimal use of funds but also to set out how these funds can be better used to leverage more private investments in energy renovations.

Nearly Zero Energy Buildings

According to the EPBD Article 9, all new buildings in the EU must be nearly zero-energy buildings (nZEBs), a level defined by national governments, by 2020. Up to now only 60% of Member States have legally specified their nZEB definition.6

Specific requirements setting maximum energy consumption needs of nZEBs are called for, to specify the final energy demand, the renewable share and nearby-produced energy. This should encourage buildings to have the lowest possible energy demand, with any remaining needs met by renewable energy.

Increasing skills

Strategic initiatives like BUILD UP Skills should seek to upskill the construction sector. The transformation of the construction sector through enhanced training and qualifications for property developers, architects, and the wider workforce is needed to build competence and awareness of innovative combined solutions.

Removing inefficient technologiesHeating systems are responsible for about 80% of the energy consumption of buildings.7 Phasing out old and inefficient heating systems while guiding building owners towards renewable choices would increase the market for smart and low-CO2 technologies.

Advice tools such as building renovation passports and Energy Performance Certificates (EPCs) would increase the visibility of its potential and encourage the uptake of smart buildings.

Increased dynamic operability

Smart buildings need to go beyond being energy efficient and healthy, and also recognise and react to users’ and occupants’ needs to optimise comfort, indoor air quality, well-being and operational requirements. Ensuring these needs requires looking at several areas of legislation, including the Energy Performance of Buildings Directive, the Electricity Directive and the Energy Efficiency Directive.

Dynamic operability inside a building is intrinsically linked to the interaction of a building with the wider energy system.

Smart meters

Smart meters allow consumers and aggregators to have (near-) real time data on their energy use and to adapt their energy consumption according to the price of energy at any given time. The Commission’s proposals for an Electricity Directive include the right for all consumers to request a smart meter. It is important that these can be easily operated by everyone and be exchangable across all appliances and systems. Standardisation, for example, building on the Smart Appliances Reference Ontology, should ensure compatibility and enable consumers to easily choose and swap technologies without impacting their interoperability. For commercial and tertiary buildings, requirements should encourage the installation of smart meters. To date, only Sweden, Finland, Italy and Estonia have completed their roll-out of smart meters.1

Automation and controls

Building automation and controls are an essential element of smart buildings. The EPBD obliges Member States to set minimum requirements for building optimisation, but implementation has been slow due to a lack of guidance. Minimum performance requirements for technical building systems should be more explicit.

Sharing renewable energy

Consumers should be able to generate, consume and store their own energy, as well as to sell it to the local electrical grid and heating network. This could open the door to millions of people to become active in the market. Self-consumption of renewables is currently hampered in several Member States, due to frequent changes to support schemes, unnecessary administrative burden and policies that hinder self-consumption.8 Regulations and measures obstructing self-consumption and on-site or nearby renewable energy production such as high network tariffs, additional taxes or levies for connecting to the grid, should be lifted and administrative procedures simplified. A stable regulatory and financial framework for renewable self-consumption in buildings must be encouraged in every Member State.

On top of generating and using their own renewable energy, all consumers should be allowed to feed into the grid the electricity they generate, but do not use, and/or participate in demand-response activities. This means that hurdles to participation, such as exclusion of smaller players or high prices for grid connections, should be prevented. Significant barriers to demand-response continue to exist in most European countries.1

Participation of customers in demand response should be encouraged by Member States as it could deliver many benefits, not least by providing flexibility and additional capacity. The cost of balancing this resource and increased renewable energy generation is often cited as a reason for limiting this capacity. However, the European Commission estimates that increased demand-side flexibility could lead to savings of Euro5.6bn/yr from reduced back-up capacity, network and fuel costs.9All consumers should also be able to have dynamic pricing contracts for their energy supply and network tariffs. This, alongside smart meters and controls, would allow them to benefit from adapting their energy consumption according to the price of energy at any given time. This could also include storage of renewable energy within the home, for example in water tanks or electric vehicles.

Summary

The proposed Clean Energy for All Europeans policy package is a unique opportunity to shape what the EU’s building stock will look like in 2030. Missing the chance to set out a framework that enables and encourages efficient and smart buildings will come at a high cost for the EU in terms of global competitiveness, restrained investments and grid congestion. Legislation should avoid locking-in technological pathways by instead setting out a dynamic framework that supports increased interoperability within and between buildings, districts, vehicles and the energy system.

Buildings are an integral and elementary part of Europe’s energy system and should play a pivotal role in the clean energy transformation of Europe. For buildings to be able to wield this responsibility as micro energy-hubs - empowering occupants to control their own renewable energy production and consumption; cutting energy bills; supporting the uptake of electrical vehicles; and facilitating better living and workplaces – they must first and foremost be energy efficient. The European building stock is the cornerstone of European society. It is time to be smart about it.